"The 26.20 high in May was part of "Rounding Top" pattern. The failure was 21.15 June low. Support is at 15-16. Technically, the peak for the housing sector was anticipated by lumber achieving an Upside Exhaustion in March. On the financial side, Utilities XLU accomplished an Upside Exhaustion in April. This is also breaking down."
Not only in the U.S. but cash buyers of real estate investment stocks and trusts (REITs) in Canada, Europe and Asia (IYR, FTY, PSR, RWO, IFGL) have been selling the July 2013 peak.
And now in August the "Chinese buy real estate at any price" Guggenheim AlphaShares China Real Estate ETF (TAO) looks to have joined the cash exit window.
"This key sector (Housing) had a huge impact on the broad market in 2007/2008. Will the price action result in a different outcome this time?" Chris Kimble goes on to make the point that:
Home builders created a bearish wedge in 2006, broke support, rallied to "kiss the underside" of resistance then proceed to fall over 80% in value and the broad market followed.
Over the past couple of years, Home builders formed a large bearish rising wedge, broke support, rallied to kiss the underside of resistance 90 days ago. Since the "kiss" took place, the Home builders ETF (ITB) is down 20% in value and Real Estate ETF (IYR) is not far behind down 15%.